Shares of Garden Reach Shipbuilders & Engineers, a defence public-sector enterprise with Miniratna Category 1 status, advanced 8.87% to ₹474 apiece in Friday's trade after the company, in an exchange filing, said that it signed a contract with the Ministry of Defence for the construction of four Next Generation Offshore Patrol Vessels (NGOPV). The total project cost of four GRSE vessels is around ₹3,500 crore.
“The first vessel is to be delivered within 44 months from Contract Signing and subsequent vessels at six-month intervals. The length of the NGOPVs will be 110 m (Approx) with displacement of around 2900 tons and have a max speed of more than 23 knots," the company said.
Garden Reach Shipbuilders & Engineers (GRSE) is one of India's leading defence public-sector undertaking shipyards that primarily caters to the shipbuilding requirements of the Indian Navy and the Indian Coast Guard.
The company's shares have delivered spectacular returns to their shareholders, gaining 102.50% over the last one year, rising from Rs. 226.70 apiece to Rs. 459 currently. Further, the stock gained nearly 121% from its 52-week low of Rs. 207.70.
Defence-related stocks turned investors' favourite picks in the last one year as the Indian government looked committed to reducing the import of defence products and purchasing locally produced weapons and systems.
The government has allocated a budget of ₹5.94 lakh crore for the defence sector in the union budget for 2023–24, which is an increase of 13% compared to the previous year's allocation of ₹5.25 lakh crore.
The company's net profit remained almost flat at ₹64 crore for the December quarter of FY23 compared to the same period last year, which saw a net profit of ₹63 crore. However, the company's total revenue rose significantly by 43.53% to ₹699 crore in Q3FY23, up from ₹487 crore in Q3FY22.
The operating profit declined to ₹47 crore in Q3FY23 from ₹52 crore in Q3FY22, and the operating profit margin fell by 400 basis points to 7%. The company's earnings per share (EPS) for Q3 FY23 came in at ₹5.58, compared to ₹5.49 in Q3 FY22.
04 analysts polled by MintGenie on average have a 'buy' call on the stock.
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